Warren Buffett Warned Investors: Grab Berkshire Hathaway’s Highest-Yielding Dividend Stocks Now

If any investor has stood the test of time, it is Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws thousands of loyal fans who are investors. Typically, when Buffett speaks, investors and Wall Street listen. Because often actions speak louder than words, one has to look only at the massive cash position Buffett has built at Berkshire Hathaway to know that he likely sees some very dark clouds on the investment horizon.

Buffett remains one of the world’s most prominent investors, renowned for his long-term buy-and-hold strategies and extensive portfolio of public and private holdings. With interest rates poised to move lower at some point, it makes sense to add Buffett’s highest-yielding dividend-paying stocks, which will likely hold their ground should the stock market continue its downward trend. Four stocks in the Berkshire Hathaway portfolio that pay the highest dividends also offer very attractive entry points now, making sense for long-term growth and income investors.

Why do we cover Warren Buffett stocks?

There are few investors with the results and reputation that Buffett has garnered over the past 50 years. While investing has evolved over the past half-century, buying good companies with products and services recognized worldwide, while paying dividends, will always remain a timeless approach.

Ally Financial

Ally Financial Inc. (NYSE: ALLY) was formerly known as GMAC. The bank with no buildings posted solid first-quarter earnings and pays a very dependable dividend. Ally Financial is a pioneer in the digital financial services industry and offers a diverse range of innovative digital financial products and services to consumer, commercial, and corporate customers, primarily in the United States and Canada.

It operates through four segments:

• Automotive Finance Operations
• Insurance Operations
• Mortgage Finance Operations
• Corporate Finance Operations

The Automotive Finance Operations segment offers:

• Automotive financing services, including retail installment sales contracts
• Loans and operating leases
• Term loans to dealers
• Financing dealer floor plans and other lines of credit to dealers
• Warehouse lines to automotive retailers
• Fleet financing. It also provides financing services to companies and municipalities to purchase or lease vehicles and vehicle remarketing services.

The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contracts and guaranteed asset protection products and underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory.

The Mortgage Finance Operations segment manages a consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties and direct-to-consumer mortgage offerings.

The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies and leveraged loans and commercial real estate products to serve companies in the healthcare industry.

Ally Financial also offers commercial banking products and services, securities brokerage, and investment advisory services.

Chevron

This American multinational energy corporation predominantly specializes in oil and gas. This integrated giant is a safer option for investors looking to position themselves in the energy sector, and it pays a substantial dividend, which was recently raised by 5%. Chevron Corp. (NYSE: CVX) operates integrated energy and chemicals businesses worldwide through two segments.

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines, and transportation, storage
• Marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum products
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.

Chevron announced in late 2023 that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion. The Federal Trade Commission approved the deal last October and is expected to close this summer.

Citigroup

This American multinational investment bank and financial services company is based in New York City. This is a top money center bank, and Buffett bought a massive $2.5 billion worth of stock in the summer of 2022. Citigroup Inc. (NYSE: C) is a leading global diversified financial services company that provides consumers, corporations, and governments with a broad range of financial products and services.

Citigroup offers:

• Consumer banking and credit
• Corporate and investment banking
• Securities brokerage
• Transaction services
• Wealth management services

Citi operates and does business in more than 160 countries/ jurisdictions in North America, Latin America, Asia, Europe/Middle East, and Africa (EMEA).

Trading at an incredibly cheap 6.9 times estimated 2026 earnings, this company looks very reasonable in what remains a volatile stock market and in a sector that has some early in 2024 but looks to be gaining ground.

Kraft Heinz

Kraft Heinz Co. (NYSE: KHC) is the third-largest food and beverage company in North America and the fifth-largest in the world. Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous dividend. Kraft Heinz was formed via the merger of H.J. Heinz and Kraft Foods.

The company is a leading global food company with estimated annual revenues of $25 billion from well-known brands such as Kraft, Heinz, Oscar Meyer, and Maxwell House.

Kraft Heinz derives 76% of its revenues from the domestic market and 24% from the International segment.

The company’s additional brands include:

• ABC
• Capri Sun
• Classico
• Jell-O
• Kool-Aid
• Lunchables
• Ore-Ida
• Philadelphia
• Planters
• Plasmon
• Quero
• Weight Watchers
• Smart Ones
• Velveeta

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